Redburn 'cynical' on Burberry's new strategy

Analysts at Redburn are "cynical" over Burberry Group’s strategy to achieve a greater fashion mix and higher luxury positioning, classifying the fashion designer as a "risky business" and reiterating their 'sell' recommendation for the firm's shares.

In a research note sent to clients, the broker questioned the potency and strength of the Burberry brand due to its "sluggish" share progression and pointed out the mixed track record of Burberry’s leather goods.

The broker also cites the group’s low sales productivity as driving inferior productivity.

Finally, Redburn disagreed with the fashion designer that it would see any positive impact from the turnaround of Gucci, which saw sales improve in all regions and categories in 2017.

"This is all sat on a 27x multiple, usefully above its history indicating that the market has already baked in full delivery on strategy. We are not so sure, and our outer year forecasts sit below the company's ambitions," said Redburn’s note.

As of 1453 BST, Burberry Group’s shares were down 2.00% at 2,105.00p.